Research On The Influence Of Differentiated Dividend Tax On Cash Dividend Policy

As one of the three major financial decisions,dividend policy plays an important role in the enterprise.According to the signal transmission theory,a good dividend policy can deliver information to the outside world that the company will have development opportunities in the future,boost the confidence of investors and set up a positive corporate image.Therefore,listed companies and a number of scholars have been discussing the hot topic,how to make a reasonable dividend policy and what factors dividend policies need to be considered.Especially,it has been controversial whether dividend policies can be affected by the investor tax in the world for a long time.In 2013,the differentiated dividend tax policy is implemented in China,which combines the holding time and dividend tax rate of investors.It provides a rare opportunity for research.In the paper,We begin with a sample for the A-share listed companies from 2011 to 2014.In empirical test,we use the dividend yield as dependent variable and the dummy variable which represents the year before and after the reform and holding time,management shareholding ratio,the degree of separation of ownership and control as an independent variable.We also include company size,asset-liability ratio,growth,Roe,cash flow capacity and industry factors,which are control variables.The Tobit regression and classification of regression are be used in this paper to test whether dividend tax impact on the cash dividend policy.We conclude the following conclusion:First,individual investors' dividend tax rate is determined by their holding period,so the firm's dividend policy can be shaped by this dividend tax rate.Specifically,compared with the companies whose investors hold the shorter time,the company where investors hold a longer time are more likely to payout more cash dividend.This is because the individual investors in China's capital market are dominant,and they are more likely to be the determinants of the marginal tax rate of investors.When individual investors play an important role in the company,the firm can respond to the change of individual investor tax rate.Second,it is also found that the influence of differentiated dividend tax on the cash dividend policy is also affected by the proportion of management shares and the separation degree of the controlling shareholder.When the proportion of management shares is high and the controlling shareholders' divergence is small,they are consistent with other shareholders' interest,reduce the company's agency costs,and thus develop a dividend policy in line with the interests of the majority of shareholders.